Sweden Cracking Down On Unlicensed Internet Gambling Companies

Sweden is one of the more tightly controlled online poker markets in the European Union, as the national government really only allows Internet gaming through one licensed firm: the state-backed Svenska Spel.

That hasn’t stopped foreign operators from giving their best shot in the nation, though, and many have blatantly offered games to Swedish players for years, advertising their poker rooms in the country despite the government’s wishes.

However, that era could be coming to an end. Sweden’s Ministry of Finance proposed an amendment to the nation’s Lottery Law earlier this week, one that would bring harsher, identical punishments down on unlicensed operators whether they were based in Sweden or outside the nation.

New Law Would End Discriminatory PracticesÂ

The fact that the new version of the law would not discriminate between foreign and domestic firms is the key point that could spell problems for unlicensed operators.

Previously, foreign operators were subjected to harsher punishments than groups that tried to push unlicensed sites from inside Sweden. That was a problem under European law, which didn’t allow for Swedish firms to be treated more favorably than those in other EU nations.

That theoretical issue became a practical one when two Swedish newspaper editors were charged with violating the Lottery Law when they allowed their papers to take ads from unlicensed iGaming sites.

That case was ultimately dismissed by Sweden’s Court of Appeal in 2011 when judges found that the Swedish law wasn’t compatible with European laws on free trade.

Not surprisingly, that ruling in turn opened the floodgates when it came to advertising for unlicensed sites. By 2013, 2.6 billion Swedish krona ($300 million) was spent on advertising by unlicensed sites across the country, doubling the amount that Svenska Spel was spending.

And while many argued that the government-supported firm shouldn’t have a monopoly on Internet poker and other games, they are currently the only licensed site, which prompted the government to step in.

Under the new rules, any unlicensed operator, is subject to the same punishments. That includes fines or up to six months in jail for anyone who is found guilty of “intentionally and unlawfully [promoting] participation in a lottery.”

Most Online Poker in Sweden Played Through Svenska Spel

Right now, most of Sweden’s online poker players and gamblers do play on Svenska Spel. According to estimates, about 94 percent of all gambling revenue in 2013 came on the licensed site, while unlicensed operators took in just six percent of the market.

The European Gaming and Betting Association has warned that the state-sanctioned monopoly might be illegal, however, and said earlier this year that the question could eventually be decided by the European Court of Justice.

Svenska Spel’s online poker operations may be best known worldwide for the series of distributed denial-of-service (DDoS) attacks that the site faced late last year.

When the poker room tried to begin the 2014 Swedish Masters in early November, they quickly were forced to cancel the first event due to ongoing DDoS attacks that had started in the week leading up to the tournament.

The situation did not improve in the days after that incident, either. Because of major disruptions over the following weeks, Svenska Spel eventually decided to temporarily shut down their poker room on November 13.